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Sanmina-SCI's CEO Discusses F1Q2012 Results - Earnings Call Transcript

In some cases, like the communications network segment we suffered from week demand and in other cases we had reasonable demand, but we suffered from supply issues to the floods in Thailand.

Our gross margin came in at 7.3%, which was down 50 basis points from the fourth quarter. Operating margin declined 80 basis points from last quarter to 3.3%. Non GAAP- EPS was $0.28. This was based on 82.7 million shares outstanding on our fully diluted basis. Finally, cash generation was a challenge this quarter with cash flow from operations at negative $13 million. I’ll discuss cash in more detail in a few minutes.

Please turn to slide four. Revenue was down 11% or $195 million from Q4 to $1.5 billion. From a GAAP perspective we reported net income of approximately $9 million, which results in earnings per share of $0.10. This was down relative to last quarter by $0.12.

Restructuring costs totaled about $4 million for Q1. The cost primarily reflects what we have been recognizing as expenses that are incurred related to real estate. Looking forward, we will continue to see some ongoing restructuring charges on our GAAP P&L of approximately $4 million to $5 million per quarter that primarily relate to real estate which is being held for sale. This real estate is listed on the market at over $100 million. Over the last two years we have sold over $50 million in real estate.

My remaining comments will focus on the non-GAAP financials for the first quarter. At a $110 million, gross profit was down $23 million from the prior quarter. Gross margin came in at 7.3%, which was 50 basis points below the previous quarter. Gross margin was at the low end of the range we had anticipated for the quarter.

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